Cable TV

Mumbai's small cable ops raise cudgels against MSOs, pay channels

MUMBAI: The battle lines between individual small cable operators and the Multi Service Operators (MSOs) have been clearly drawn as the CAS (Conditional Access System) deadline of 14 July 2003 set by the government approaches.

Individual cable operators and smaller players have realised rather belatedly that the consolidation of the cable business industry would spell doom for them.

Some cable operators associations with operations in the suburbs of Mumbai have formed the Mumbai Cable Operators' Federation (MCOF). Their motto - create a single platform and invite all cable operators against injustice and oppression committed by what they call,' the nexus of broadcasters and MSOs'.

The MCOF alleges that cable operators who owe allegiance to the MSOs have captured 60 per cent of Mumbai (total of 5000 cable operators in Mumbai) whereas the small associations currently have 40 per cent of the market.

The MSOs have encouraged 'dummy' operators to apply for licences in each area of the city and intend eventually buyout all the remaining small cable operators, allege the members of the MCOF. The MCOF has demanded an investigation to unmask the MSOs who encourage dummy cable operators in each area.

Demands of the MCOF:

MCOF spokespeople Nandan Basu, Vasant Majetia and Narsi Bhanushali state that they are risking their lives by coming out openly against the MSOs and powerful politicians. They urged the government and broadcasters to conduct investigations against the MSOs who were responsible for pilferage.

The MCOF also demands that consumers' fora and associations must target pay channels for increasing their bouquet prices regularly. The MCOF urged the government to consider their grievances and grant industry status to the cable industry - especially the single operators.

The association also rued the fact that the government didn't give any representation to the smaller cable operators on its CAS committees whereas the MSOs were given due representation.

The MCOF also says that the politicians, consumers and consumer bodies are unfairly placing the blame of cable fees hikes on cable operators. Primarily, the MCOF is reacting to the fact that the Bharatiya Janta Party (BJP) has raised the contentious issue of cable fees and made it a political issue in Mumbai.

MCOF reacts to the recent campaigns by consumer associations and politicians:

BJP MP Kirit Somaiya had called a press conference on 12 February 2003 and urged consumers to pay cable operators a maximum of Rs 150 per month. Giving the cable operators a deadline of 16 February 2003.

Somaiya stated that he would file cases against those cable operators who charged more than Rs 150 per month if the cable operators don't fall in line. Generally, Mumbai's consumers pay an average of Rs 200 per month - with a minimum of Rs 100 and a maximum of Rs 250 per month, say representatives of the cable associations.

MCOF spokesperson Basu says: "We are ready to support Somaiya's campaign and the consumer bodies, as long as they realise that the main culprits are the broadcasters (with pay channels) and the MSOs. We have always maintained that we are businessmen who empathise and understand the problems of the consumers."

"There are so many consumers who cannot afford to pay us or delay payments. We have borne the burden and paid the MSOs money out of our own pockets. We often get blamed because we interface with the consumers directly whereas the MSOs remain in the background," says MCOF's Basu.

"The consumer bodies are not communicating that the free-to-air channels can cost anything between Rs 100-150. Their internal guideline state that these amounts are valid for free-to-air channels whereas the consumers take it for granted that they would get pay channels within the same amount. The consumer bodies have not bothered to listen to our plight" says MCOF's Bhanusali.

MCOF blames broadcasters and MSOs:

The MCOF circulated a note which shows that the cost of accessing different bouquets, maintenance charges and the entertainment taxes (paid by the cable operator and not the MSO) add up to Rs 369.65 per month.

The following is the break-up: Zee Turner - Rs 60; Star bouquet - Rs 60; Sony's One Alliance bouquet - Rs 55; Modi Entertainment (MEN) - Rs 25.05; ESPN-Star Sports - Rs 32; Movies copyrights - Rs 15; cost of material and maintenance - Rs 75; cost of entertainment taxes - Rs 30; cost of service charges Rs 17.60. The MCOF mentions that the figures for the year 2002 were in the region of Rs 252.26 per month; and Rs 100 in the 1990s.

Currently, the cable operators collect the charges from the consumers and pay the MSOs Rs 150 per month whereas the MSOs pay the individual bouquet charges to the broadcasters. In 2002, they used to pay Rs 100 to the MSOs. The MCOF also adds that MSOs never declare the exact numbers to the broadcasters and instead blame the cable operators for withholding the number of connections.

"We are unfairly being branded as extortionists and hooligans. We are ready to charge consumers Rs 140 per month if the pay channels become free-to air and the MSOs stop their manipulations. Our maintenance charges are Rs 75 per month and we also pay taxes. The MNC broadcasting companies have started acquiring cable operations. Once they take charge of cable operations, the consumers will be pulled into a never-ending vortex from which there is no escape, " says MCOF's Bhanushali.

The MCOF alleges that broadcasters and MSOs have entered into a pact wherein the broadcaster only routes signals through the MSOs. The broadcasters refuse to directly deal with the small cable operators, as per the claims of the MCOF. The MCOF members also state that the MSOs dictate terms to the cable operators.

Even when certain MCOF members agreed to invest Rs 400,000 and Rs 7,00,000 for setting up control room facilities for free-to-air channels and pay channels respectively, the broadcasters refused to share signals and instead directed them to the MSOs.

"MSOs have a control room with the headend, amplifier and splitter from which we get our signals. MSOs and broadcasters refuse to give us decoder boxes even if we wish to. MSOs also encourage their own people to apply for licences. These dummy operators exist in each and every area. Even if we blank out signals, the dummy operators obey the instructions of the MSOs and start offering alternative services to consumers at reduced rates. None of these declarations are made to the broadcasters, " alleges Basu.

The MCOF also states that the government grants licences to all and sundry without checking whether it has given a licence in any particular area to an operator.

MCOF members state that they cannot complain against the MSOs because their signals will cut and their lines will be opened. "The MSOs also have an unwritten pact that none of the other MSOs would support a cable operator who has been blacklisted. We are trapped from all sides," says MCOF's Raju Chaudhary.

MCOF feels that CAS will spell doomsday for the smaller players:

The MCOF members say that they are unsure of what will happen post 14 July 2003 when CAS implementation in the city of Mumbai will commence. "More than 40-50 per cent of Mumbai's residents stay in slums. They crib about paying Rs 100 per month; will surely refuse to invest Rs 3000-4000 in a set top box (STB) and the increased monthly charges. The government has not yet defined any MRP (market retail price), unlike in the case of FMCGs," says MCOF's Majetia.

"Even post CAS, the broadcasters will make money from advertising even on their pay channels. We don't get a single penny out of the local advertising shown on regional cable channels as these monies go to the MSOs," says MCOF's representative Majetia.

MCOF demands industry status:

The MCOF has also demanded that the government must consider their case favourably and grant industry status to the cable operators.

MCOF spokesperson Majetia says: "The cable operators started this business long back without government support. We invested lakhs of rupees despite being unsure of the returns. The government started levying taxes after the business model succeeded. However, the small cable operators find it very difficult to get loans or any form of finance from banks or financial institutions."

"The cable industry has given employment to nearly 200,000 unskilled and semi-skilled people and more than 5 million people all over the country. Post CAS, all these people will suffer. The management teams of MSOs are earning five figure salaries whereas our returns are decreasing day by day," adds MCOF's Basu.

Better late than never, seems to be the motto of the MCOF which has raised cudgels against the broadcasters and the MSOs!

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